WATCH: Treasury chief director Avril Halstead highlights how SAA had ‘government guarantees’

National treasury chief director Avril Halstead is testifying in the High Court in Pretoria in the trial brought forward by Organisation Undoing Tax Abuse (Outa) and the SAA Pilots Association accusing SA Airways chairperson Dudu Myeni of being responsible for the ongoing financial woes at SAA.

Halstead spoke on the time she was at SAA trying to navigate through financial turmoil.

She spoke on government guarantees that were issued to SAA. These government guarantees were a safety net for SAA as government had assured to cover SAA’s debt.

“If SAA is unable to pay, the government is required to make the payment on SAA’s behalf. SAA was technically insolvent” in 2014, Halstead told the court.

The government was providing sufficient support to SAA, to have the company deemed solvent to lenders.

“Lenders were lending on the basis that if SAA was unable to pay, government would cover” the shortfall.

Halstead disclosed how if government refused to provide the guarantee, SAA would be unable to finalise financial statements on an ongoing basis.

The application against Myeni is based on her conduct while chair of the SAA board from December 2012 until October 2017 when she left the board.

Should the court declare Myeni a delinquent director, she would be barred from serving as a director, as a senior executive, or on the board of organisations throughout the country for a period of approximately seven years.

The case forms part of Outa and Saapa’s application to declare Myeni as a delinquent director after the national carrier ran into problems when she became chairperson from 2012 until 2018.

In December, Myeni lost her bid to challenge Outa’s involvement in the case as she wanted Outa removed from the case, arguing that its involvement constituted overreach for a civil society organisation, as Outa was not directly affected by events at SAA.

The court, however, ruled that Outa had a right to legally challenge Myeni as an organisation serving the interests of taxpayers, as the case met the requirement of public interest and was in the interests of justice.

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